Twitter said on Thursday it could turn its first ever profit in the fourth quarter and added more monthly users, after making cuts in expenses the past few months and finding sources of revenue beyond the advertising.
Twitter has been battling the perception that it's a niche media platform. The company reported that monthly active users gained 4 percent to 330 million in the third quarter. Daily active users increased 14 percent, the fourth consecutive quarter of double-digit growth, the company said Thursday.
Chief Executive Officer Jack Dorsey has shifted the company's focus to videos and live events as a way to spur audience growth. Twitter attributed the user gains to changes making the platform easier to use, improved marketing and heightened awareness of Twitter from global events.
"This quarter we made progress in three key areas of our business: we grew our audience and engagement, made progress on a return to revenue growth, and achieved record profitability," Dorsey said in the statement.
Twitter reported its net loss narrowed to $21.1 million in the quarter. Profit excluding certain costs was 10 cents a share. Revenue declined 4.3 percent to $589.6 million. Twitter says the better-than-expected sales were driven by its video advertising and data-licensing platforms.
Sales in the U.S. fell 11 percent from the same period a year earlier. Digital advertising market is dominated by Alphabet's Google and Facebook. Total revenue growth was driven by international sales, which grew 6 percent from a year earlier. The company's advertising revenue totaled $503 million, a decrease of 8% year-over-year.
Twitter said it had adjusted the number of monthly active users back to the fourth quarter of 2014 after determining it had incorrectly counted users of a service for third-party apps as active participants on the platform. After the change, the company said it had 326 million users in the second quarter, rather than 328 million.
Twitter said on Tuesday that it's bringing greater transparency to advertisements on its site by exposing who paid for the ads, who they are targeted to and how long the campaign has been running. Last week, Twitter said it will immediately and permanently suspend accounts that clearly harass or post nude images without consent. Twitter has also made improvements to its algorithms that catch spam and malicious actors after researchers found hundreds of thousands of bots, some linked to Russian operators, that posted political messages during the election.
Twitter did not disclose the actual number of daily active users. The company argues that doing so would result in unfair comparison with Facebook, which has about 1.3 billion daily active users. Competitor Snap had 173 million daily active users in the second quarter.
During Q3, Twitter announced approximately 30 new live-streaming partnerships, including 10 international deals and two with leading consumer brands (Converse and Tommy Hilfi ger). In addition, the company disclosed in September that all 16 live-streaming partnerships that it announced at the 2017 Digital Content NewFronts have been funded and will launch. These partnerships are in addition to the 35 recently announced ideo deals in Asia Pacific, which remains an important region for Twitter and a strong engine of future growth. In addition, Twitter streamed 96 million hours of live user-generated content via Periscope in the quarter.